Parul
Fintechs will fuel digital lending over the next seven years, and take it ahead of traditional lending by 2030 in the unsecured loans category, a credit information company said on Tuesday. This will be driven by deeper inroads being made in the unsecured small-ticket size segment as well as the secured collateral-based high-ticket size market, the report by Experian India said.
The company said it analysed the role of fintech-led digital lending to arrive at the predictions on the unsecured lending front, where lending happens through personal loans and credit cards sans any securities.
“Traditional lenders have always dominated asset-backed lending. With increased digitisation, this segment may become accessible to fintech lenders, allowing them to capture a sizeable portion of the lending pie,” Saikrishnan Srinivasan, managing director at Experian Credit Information Company of India, said.
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The research highlights that the next 100 million customers are likely to have a vastly different profile and expectations than those currently in place.
The fintech companies will be challenged in the next wave of growth, even though they have responded well to automating the credit decision making process and enhancing the onboarding experience till now.
The research further said big technology organisations will also play a greater role in the digital lending side going forward, despite the repeated concerns on big techs’ play.
As fintechs become systemically important in catering to credit demand, they are likely to come under greater regulatory supervision, and need a significantly higher investment in compliance, cyber security, and other business critical functions, it noted.
